The Future of Innovation

The Future Of Innovation is Holistic And Networked

Mr Tom Hulme

Innovation can be fragmented. Inside organisations, it has a tradition of different departments working in isolation behind closed doors, with varying degrees of empathy for the needs of their consumers. That kind of scenario is changing fast as the line between the consumer and industry blurs. For it to flourish, innovation's future lies in a less disjointed approach - we're already seeing signs of it becoming more holistic and collaborative.

A more holistic approach is now crucial because it's increasingly difficult to create sustainable advantage without aligning every aspect of a consumer offer. An interesting example is Apple, which is often cited as a a world-class product developer. However, Apple's potency is the fruit of its innovative approach to an ecosystem of product and service design, retail, marketing and manufacturing – it certainly didn't invent the MP3 player and arguably didn't build the most innovative one at the time. Its dominance is ongoing proof that holistic business ecosystems deliver the greatest competitive advantage.

This holistic perspective also needs a lateral vision. As great ideas can be discovered in diverse and unexpected places, we need to collaborate in new and surprising ways. We believe that the best ideas come from crashing, combining and contrasting disciplines and perspectives, and technology is enabling us to do this in very different ways. At IDEO, we often involve disperse and eclectic networks of consumers and experts in creating and evaluating ideas. The effect is sometimes fusion, and sometimes fission, but the results are always fruitful. In particular, it has proved to us the value of seeking, as well as expert insights, the wisdom of the crowd.

Close collaboration with the consumer can give rise to remarkably effective and powerful business models. A particularly successful example can be found where the public intersect with the TV and record industries. X-Factor is a UK TV talent show (or American Idol in the US) in which viewers vote for the performers they like best. The format has transformed a business expense (record companies searching for fresh talent) into a revenue source (viewers pay to vote). Because singers are only launched on the market when the viewers have made it clear they will buy their music, risk for the record company is mitigated.

And it's becoming clearer and clearer that consumers want to be involved. The popularity of Starbucks' Mystarbucksidea.com which allows consumer to create and rate new ideas and keep up to tabs with developments, is a case in point. Opening direct communication with consumers globally, at relatively low cost will soon become the norm.

The future of innovation is where big impact comes from applying a holistic approach and building a portfolio of innovations rather than one hit wonders, it will be where wisdom of the crowd is the first port of call rather than the last resort.